Longevity Risk, Subjective Survival Expectations, and Individual Saving Behavior

52 Pages Posted: 14 Nov 2010 Last revised: 24 Mar 2011

See all articles by Thomas Post

Thomas Post

Maastricht University - School of Business and Economics - Department of Finance; Netspar

Katja Hanewald

UNSW Sydney - School of Risk & Actuarial Studies and ARC Centre of Excellence in Population Ageing Research (CEPAR)

Multiple version iconThere are 2 versions of this paper

Date Written: March 11, 2011

Abstract

Theoretical studies suggest that unexpected changes in future survival probabilities (longevity risk) are important determinants of individuals’ decisions about consumption, saving, asset allocation, and retirement timing. This study provides empirical evidence that individuals are indeed aware of longevity risk and that this awareness affects their savings decisions. These results are based on a data set that matches subjective survival expectations and savings indicators from the Survey of Health, Ageing and Retirement in Europe (SHARE) with life table data from the Human Mortality Database.

Keywords: longevity risk, subjective survival expectations, forecast dispersion, savings behavior

JEL Classification: D14, D84, D91, H31, J11

Suggested Citation

Post, Thomas and Hanewald, Katja, Longevity Risk, Subjective Survival Expectations, and Individual Saving Behavior (March 11, 2011). Netspar Discussion Paper No. 07/2010-043. Available at SSRN: https://ssrn.com/abstract=1708035 or http://dx.doi.org/10.2139/ssrn.1708035

Thomas Post (Contact Author)

Maastricht University - School of Business and Economics - Department of Finance ( email )

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HOME PAGE: http://www.thomas-post.com

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HOME PAGE: http://www.netspar.nl

Katja Hanewald

UNSW Sydney - School of Risk & Actuarial Studies and ARC Centre of Excellence in Population Ageing Research (CEPAR) ( email )

School of Risk & Actuarial Studies
UNSW Sydney
Sydney, New South Wales NSW 2052
Australia

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